Online Auctions [9]
eBay to Offer Pay Per Click Ads to its Merchants
eBay announced on Tuesday a new pay per click advertising program for its sellers. "Keywords on eBay" will allow eBay sellers to bid on keywords to trigger banner ads touting the seller. Keywords can be eBay categories, types of items, brand names, store names, or eBay user identifications. Minimum bids begin at 10 cents. eBay has 150,000 merchants using its platform as their main place of business, and nearly 20 million active users. eBay estimates that its site handles 79 million item-related searches each day. [Full story: eBay Starts Keyword Advertising - Internet News]
eBay to Acquire Chinese Auction Site, EachNet
eBay has agreed to pay approximately $150 million in cash to acquire the remaining 67% of the stock of EachNet Inc., a popular auction site in China. EachNet currently has more than two million registered users and 300,000 listings. China has more than 59 million consumers online today, making it the world’s second-largest Internet population behind the United States, and it is predicted that the number will grow to 86 million by the end of 2003. By 2005, China’s e-commerce revenue is projected to grow to more than $16 billion. eBay and EachNet first formed a strategic relationship in March 2002, at which time eBay acquired a 33% interest in EachNet for $30 million.
EBay to Unveil 'Anything Points' Program
eBay launched a new promotion this week that lets consumers use airline miles and hotel loyalty points as credit toward items purchased on the online auction service. Through the eBay Anything Points program, members can convert points earned through American Airlines and Midwest Airlines frequent-flier programs, as well as Hilton hotel's loyalty program, into eBay credit. Anything Points are stored in members' PayPal accounts and can be used anywhere on eBay where PayPal is accepted. The online auction company said it plans to add more loyalty program partners to its points system in the future. One Anything Point is worth 1 cent toward the payment of an eBay item, according to the company Web site. The program is available only to eBay members with accounts registered in the United States or Canada. [Full story: eBay converts flyer miles to PayPal credit - BusinessWeek]
Liquidator Genco Increases Average Closing Values By Lowering Starting Bids
Liquidator Genco Distribution Systems recently found a correlation between the starting price of an auction and the winning bid. Pittsburgh, PA-based Genco, which sells surplus goods at eBay, used to start all bids at 30-35% of the original cost of the item. The average auction generated five or six bids and the average selling price was around $60. About four months ago, Genco dropped the starting price on all auctions to $9.99. The result? Bids have gone up and so has the average closing value. The average winning bid is now $75-$80. [Full story: Genco’s new eBay mantra: Start low, sell high - Internet Retailer]
eBay Seller Finds Other Avenues to Unload Stock
Two years ago, 80% of liquidator Excess Technologies LLC’s revenue came through eBay auctions; today, that portion is down to 5%. Liquidators found that too much product available at eBay depresses the price. For instance, Excess Technologies has been liquidating cots. “If we have more than five a day at eBay, prices will go down by 10-20%,” says Joel Holtzman, president and CEO of Excess Technologies. “If we keep adding, the prices keep going down.” Excess Technologies now sells liquidated merchandise at Amazon and Yahoo stores, Yahoo auctions, Overstock.com as well as at eBay. It also sells wholesale at Bid4Assets.com, Overstockb2b.com and eBay’s wholesale operation. It also maintains a database of 1,500 registered buyers to whom it makes product available. [Full story: Strategic liquidation: Don’t flood eBay - Internet Retailer]
eBay Faces Serious Patent Infringement Lawsuit
Trial is scheduled for next month in a complicated patent infringement lawsuit filed against eBay, according to the auction giant's annual 10-K report filed with the Securities and Exchange Commission. And the stakes are high. eBay says in its filing that "if the plaintiff were to prevail on any of its claims, we might be forced to pay significant damages and licensing fees, modify our business practices or even be enjoined from conducting a significant part of our U.S. business." The suit was filed by Great Falls, Va.-based MercExchange LLC in September, 2001, but the patents involved date back to the mid 1990s, when MercExchange founder Tom Woolston applied for patents covering methods of creating and searching online marketplaces and auctions. That was about five months before eBay founder Pierre Omidyar launched the eBay Web site. There's a complex history of motions for dismissal in the case, but the upshot, according to the 10-K document, is that claims regarding two patents are scheduled for trial April 22 in the U.S. District Court for the Eastern District of Virginia in Norfolk. eBay's Half.com fixed-price subsidiary is also a defendant in the case.
Why is Ebay Thriving When So Many Other Dot-coms Have Struggled?
Last year, eBay's profits jumped 176%, to $250 million, on a 62% rise in sales, to $1.2 billion. That represents its commissions and fees on nearly $15 billion in gross merchandise sales. This year, analysts expect eBay's revenues to climb 60%, to $1.9 billion. Why is eBay thriving when so many other dot-coms have struggled? It continues to excel at its basic business proposition. "At our core," says CEO Margaret C. Whitman, "we help make inefficient markets efficient." In these tough times, that simple message resonates with just about everyone, from eBay's collectibles merchants to newer sellers such as IBM and Sears Roebuck, which are unloading everything from laptop computers to miter saws. What makes eBay unique is not just that it used the Internet to set up a virtual marketplace. Its customers, to a large extent, create the business. After an eBay manager noticed listings for real cars in its die-cast cars category, for instance, the company created a new category for them. Now, eBay's sales of more than 300,000 cars make it the largest U.S. used-car dealer online or off, surpassing even AutoNation Inc. And in January, after spying listings for restaurant gear and medical equipment, eBay opened a site aimed at the $1 trillion market for industrial goods. The company's next big push: taking its efficiency drive abroad. [Full Story: eBay Rules - BusinessWeek]
Q&A with eBay's CEO, Meg Whitman
The head of eBay explains how it keeps growing by paying special attention to users' needs. Five years after she joined eBay as chief executive, Margaret "Meg" Whitman is scarcely seeing any slowdown in the online auctioneer's growth. Its profits last year soared 176%, to $249 million, on a 62% sales jump, to $1.2 billion. And despite the moribund economy and war in Iraq, it's expected to log $1.9 billion in sales this year, a 60% rise. The reason: The former Walt Disney and Hasbro executive has kept eBay focused on what it does best: Using its global marketplace to bring efficiencies to inefficient markets such as used, collectible, and overstocked goods. While eBay remains largely a place for small businesses and individuals to sell their wares, it's increasingly attracting the likes of Sears Roebuck, IBM, and Disney. Recently, Whitman talked with BusinessWeek Silicon Valley Bureau Chief Robert D. Hof about how eBay aims to make itself and its marketplace even more efficient. [Interview: Q&A with eBay's Meg Whitman - BusinessWeek]
eBay Spawns New Feeder Business
eBay has spawned yet another new feeder business, this one called AuctionDrop, a San Carlos, Calif., company that lets anyone sell goods on the auction giant by simply dropping them off. The premise is that not everyone has the time or inclination to learn the requisite skills to be a successful eBay seller. The deal is that AuctionDrop does all the heavy lifting -- photos, descriptions, shipping -- in return for a nice commission -- 20 to 40 percent -- on the sale. Once an item is sold, the customer gets a check in the mail. Customers can bring in anything that is legal to sell on eBay and can be shipped by United Parcel Service (under 150 lbs. with some size restrictions). AuctionDrop will evaluate it, photograph it, write a description and list it on eBay. The only catch is that the item must have an estimated sales price of at least $50. [Full story: eBay Spawns New Feeder Business - InternetNews]